Three Tips For Retailers To Beat 'Showrooming'

Almost every retailer is struggling with “showrooming,” when customers browse a retailer’s product only to purchase the product elsewhere for a lower price. This phenomenon extends beyond the obvious big-box retailers – even e-commerce sites that curate items find that users will leverage the site’s expertise and effort before they eventually buy from
Amazon.com or another vendor.

The New York Times “Bits” blog recently highlighted the most common way to fight against showrooming: price-matching. Big retailers such as
Best Buy, WalMart and
Target are embracing price-matching strategies and going further by forcing retailers to offer unique SKUs or products in an attempt to combat showrooming. However, none of strategies employed (e.g., discounts, promotions, unique SKUs, etc) are emerging as clear winners. J. Crew Group Inc's CEO, Mickey Drexler, famously criticized brands and retailers for embracing discounting in an effort to stay competitive this past January, reiterating that no one is addressing this problem of how to stay competitive at full price.

So, what else can retailers do about showrooming? Take it out of the equation by allowing customers to design and create unique products they cannot get anywhere else.

How does one start?

Begin strategic conversation between brands and retailers. Right now both operate in different silos and often end up competing against each other. Both must work together on offering custom solutions that meet their shoppers’ needs. For example, Wild Things Gear, a technical outdoor gear company, recently entered into a customization program and worked to launch a similar program for their largest retail partner, Moosejaw. Such collaboration ensures that both are able to meet their customers’ needs and offer specific product sets that reflect their particular focus.

Embrace customization as a key area of strategic growth. For any customization program to be successful, it needs to be a key area of focus for all teams within the organization, from marketing to IT. Treating it as a side project will only garner mediocre results and leave you in no better place than before. For example, customization is a key area of strategic growth and differentiation for large shoe brands such as Reebok and Nike. Nike's custom design program brought in over $100 million in revenue when it launched.

Focus on the customer experience. Your customers want to design or influence the look and feel of their purchases, so give them the opportunity to do just that. Forrester reveals that 35 percent of shoppers are interested in purchasing custom products, particularly in categories where they can stand out from their peers. This number is only growing today. Giving your customers exactly what they want will only cement their loyalty and engagement.

Showrooming is here to stay; to win, retailers and brands alike need to offer truly differentiated products. Customization through curation and personalization creates a partnership between customers and brands. Offer your customers the unique experience of participating in the creation of their purchase and they will not have any need to look to your competition.

Courtesy of YEC

Aaron Schwartz is Founder and CEO at Modify Industries, Inc., which designs interchangeable custom watches known as Modify Watches. He loves working on startup ideas and has spent innumerable (happy) hours advising friends and former students on how to grow their ideas. Anaal Patel, Product Marketing Manager at Fluid, co-authored this article.

Courtesy of YEC

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.